PRWID Clarifies Wellington's Debt Discrepancies

Shauna Alderson measures rebar that will be installed on the new pump house Price River Water Improvement District is having built for the Hill subdivision system. PRWID manager Phil Palmer indicated that the contractor is moving along well on the project and the mechanical work on the structure is approximately 70 percent complete. Crews working at the site said they will be pouring the concrete roof on Friday.

At a recent board meeting, it was announced that Wellington was behind more than $195,000 in payments for services provided to the city by Price River Water Improvement District.

But on Tuesday, the PRWID board learned that the figures were erroneous.

After meeting with city recorder Ken Powell, the district staff revised the amount Wellington owed PRWID for water and sewer.

The original figures left out Wellington's payments of more than $30,000 to PRWID. In addition, the figures included amounts the city owed, but were not past due.

On Tuesday Wellington had past due balances of $47,353.42 on water and $47,500 on sewer services. The figures do not reflect charges assessed in the last 60 days because the amounts are not past due according to the agreement between PRWID and Wellington.

"I am wondering why there is such a long cycle of past due payments in this billing system," pointed out PRWID board member Tony Gonzales.

Because Wellington bills consumers and gives residents 30 days to pay for the services, Richens said the cycle is longer than it would be for retail customers.

It takes PRWID 30 days to bill Wellington, explained the assistant manager. Then it takes 30 days for consumers to pay the city for water and sewer services. To allow Wellington time to collect the money, the city's payments are not actually past due until 60 days after PRWID sends the initial bills.

Including the city's updated charges, Wellington currently owes a total of $140,825 to PRWID.

After the figures were presented at the meeting, it was pointed out that Powell told PRWID the city would catch up payments as soon as possible.

But several board members were concerned about the details of the catchup payment schedule planned by Wellington officials.

"They have been advancing the payments on their water portion of the bill quite well in the last 60 days," said Richens. "As for the sewer bill, they have established they just don't want to pay partials on that, but will catch it up in whole payments as soon as they can."

Wellington Mayor Karl Houskeeper indicated that he believed the reason the city got behind in the first place was because they didn't increase their rates when they should have, but that they will now catch up with the bills.

However PRWID board chair Keith Cox was still concerned about the payment schedule and asked when Richens thought Wellington would be caught up with their water bill.

"That depends on a number of things," stated Richens. "It depends on the amount of water they sell. It can also depend on how much maintenance they must do to their system, in which they might have to spend some of the money they would pay us. They also have bond payments to honor, and they have to take care of that as well."

Cox reiterated that he still was not comfortable with the fact there was no real time table.

Houskeeper said that he thought that it could be done within a year. He also suggested that to be sure the payments are being made the board should probably review the situation at some regular interval.

"What I am interested in is if from now on Wellington will at least keep their monthly payments up?" asked board member Tom Matthews. "I am just concerned that they don't get behind any farther."

Richens said there were several months last year when Wellington didn't pay on the city's accounts. Wellington has multiple water accounts because there are a number of inlets from the PRWID system to supply water to the city. The inlets are metered and billed separately.

PRWID manager Phil Palmer suggested that the district request a letter from Wellington outlining the city's intentions for payment.

The board agreed with the recommendation.

Introducing a related matter, Houskeeper asked PRWID to credit Wellington on water prices comparable to what the district charged Helper for emergency supplies last year.

"We just think things should be fair and equitable," said Houskeeper. "We were charged $2.90 per thousand gallons in our base rate, while the district was selling water to Helper for $1.16 per thousand. Our figures show that would give us a rebate of $81,432."

Houskeeper also said that the city is only asking for that rebate for the 2004 calendar year and not going beyond that.

When Helpers main water line into town was being replaced between last spring and the fall, PRWID was selling water to Helper based on the rate they charge for overage to other customers. At the last PRWID board meeting, it was found there was a discrepancy between what had been intended for that excess rate by the board and what was actually in place. In a 1996 rate change the overage fee was established at $2 per thousand gallons, but when the rates were changed again in 2001, somehow that rate was dropped and the rate in the ordinance now has in it reverted back to the pre-mid 1990s rate which was $1.16.

Houskeeper could not understand how the district can sell water cheaper to a non-regular customer than to regular wholesale customers.

Staff members explained that the district's service is built on it's regular base rates to customers and that in emergencies they do little to service the non-regular customer while spending a lot of time maintaining lines and equipment for regular ones.

"But we maintain our own lines and our own equipment within our city limits," said Houskeeper. "What more do you do for us than you do for them?"

Palmer said that if the board were to approve a rebate it would affect all the wholesale customers.

"If we do this for Wellington the we would have to look at all the others too," he stated.

Cox also told Houskeeper as far as he is concerned Wellington's rate is fixed by the agreement both parties entered into years ago. He did agree the board should look at the equality situation however.

But then other questions of equity came into the discussion.

"Speaking of equality, is it fair for all residents of the county to pay more for water than those who live in Wellington city?" asked Matthews. "Why should Wellington get a cheaper rate than the non-incorporated citizens in the county? I understand that you are just trying to show that inequities exist. But who are you representing - Wellington or the best interests of PRWID?"

Houskeeper said he represented both.

Matthews said he thought that the mayor was looking out for Wellington and not the PRWID boards interests.

Cox then intervened in the discussion between the two board members.

"The water to Wellington has been billed based on the boards activities in the past," he said. "Policy has been made. Helper was billed by our policies. Wellington has been billed by our policies. I am not even sure it would be legally appropriate to take this type of action."

Board members then discussed what was and wasn't policy and what should be done about making things more equitable. They then directed staff to look at the present system and to bring back a resolution to the board on changing rates for emergency water supply activities.

The board also asked staff to discuss with PRWID's attorney the legality of taking action on Houskeepers proposal to rebate money back to Wellington. The issue will be reviewed at the next meeting.